Zhongjia Bochuang (ZJBC), a Chinese ICT company listed in Shenzhen with a $900 million market cap, is scaling up its bitcoin mining investments.
The firm said in a statement Tuesday that it has signed a partnership with Shenzhen-based manufacturer MicroBT. ZJBC plans to invest up to 1 billion yuan ($155 million) in MicroBT’s WhatsMiner bitcoin mining equipment over the next two years.
“The scale for the first year will be no less than 20,000 units with the first batch to be delivered by May 2021 with no less than 2,000 units,” ZJBC said in the statement.
Founded in 1997, ZJBC is one of the first Chinese companies that stepped into the telecommunication field and now focuses on ICT and financial services.
While MicroBT told The Block that the plan is in the form of a memorandum of understanding, it nonetheless shows how yet another Chinese firm with backing from state-owned capital has become increasingly public about its bitcoin investments. Based on ZJBC’s corporate filing with the Shenzhen Stock Exchange, about 2.8% of the firm’s equity is connected to Chinese state capital.
On Sunday, Hong Kong-listed Chinese beauty retouching apps maker Meitu said it purchased $40 million in bitcoin and ether as part of its treasury management. In December, Chinese online lottery platform 500.com disclosed its pivot into the bitcoin mining space after having quietly scaled up bitcoin mining farm businesses since early 2019.
But ZJBC’s scaling plan is also not entirely surprising given the firm’s existing investment in the bitcoin mining space. What’s more, its chairman – legendary entrepreneur Wu Ying – is already an angel investor in MicroBT through his investment fund.
According to ZJBC’s official responses to shareholder questions posted on the Shenzhen Stock Exchange, the company said on October 28, 2019, that its chairman is one of the main investors in MicroBT and the firm has been profiting from bitcoin mining farm businesses in Sichuan since 2018.
“Our fully-owned subsidiary Changshi Telecommunication has been involved in building and maintaining blockchain computing facilities since 2018 and brought in over 50 million yuan [$7.6 million] in revenue in 2018 already,” ZJBC told shareholders at the time.
Based on ZJBC’s 2018 revenue breakdown, the Changshi subsidiary generated $276 million worth of income, with 2.76% of it coming from mining farm businesses. For the first six months of 2020, Changshi brought in revenue of about $92 million for ZJBC, which, as of June 30, had 735 million yuan ($112 million) held in cash reserves.
To those who are old enough to have witnessed China’s technology boom of the late 1990s and early 2000s, Wu Ying’s name should ring a bell – at least a remote one – and so should the “Little Smart” device made by UTStarcom.
ZJBC’s chairman Wu, who is regarded as the father of “Little Smart,” co-founded Starcom in 1991 after studying in the U.S. in the 1980s and working for Nokia Bell Labs. Starcom merged with Unitech in 1995 to focus on the telecommunication business.
Around 1996, UTStarcom launched “Little Smart” in China, a handheld phone not based on mobile networks used today but on the so-called Personal Handy-phone System, or PHS technology.
After UTStar went public on NASDAQ in 2000, the success of Little Smart in China – which by the end of 2006 had nearly 100 million users – brought the firm as much as $2.5 billion in annual revenue at its peak. But the evolving technology of mobile cellular networks eroded the market shares of Little Smart, which was shuttered by Chinese regulators in the early 2010s.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Source: https://www.theblockcrypto.com/post/97681/chinese-tech-zjbc-bitcoin-mining-microbt?utm_source=rss&utm_medium=rss
